Review of the Nightly Encumbrance Process in HRS

Overview

The University of Wisconsin calculates encumbrances using either the fiscal year encumbrances process (UW_ENCAN) or the nightly encumbrances process (UW_ENCNT). The fiscal year encumbrances process creates the baseline encumbrance data for the entire fiscal year; whereas the nightly encumbrances process reverses the original calculation and recalculates the encumbrance with the updated data. Specific changes will trigger a recalculation.

Process Considerations:

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A. Nightly Encumbrance Process Overview

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B. Encumbrance Triggers

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C. Encumbrance Exceptions

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D. Encumbrance Calculations Not Uniform

Empl Class Session Comp Frequency Approx. Days
University Staff (CJ/CL) CE H 364
Faculty/Academic Staff/Limited Appointment (FA/AS/LI) (Salaried Bi-Weekly) FY B 364
FA/AS/LI (Hourly Bi-Weekly) FY H 364
FA/AS/LI (Salaried 9 Month Bi-Weekly) AY 9B 273
FA/AS/LI (Hourly 9 Month Bi-Weekly) AY H 273

E. How to Manually Calculate Encumbrances

1. Obtain the following information from Job Data and Budget Funding Data Entry, using the following HRS navigation paths:

  • Navigate to: Workforce Administration > Job Data
    • FTE:  Job Information tab, Standard Hours section
    • Pay Basis: Job Information tab, Job Information section
    • Comp Rate: Compensation tab, Compensation > Pay Components section
    • Frequency: Compensation tab, Compensation section
    • Encumbrance calendar: UW Custom tab, Encumbrances section
    Job Information tab

    Compensation tab

    UW Custom tab
    • Navigate to: Set Up HCM > Product Related > Commitment Accounting > Budget Information > Budget Funding Data Entry
      • Also accessible from the Finance WorkCenter found at Payroll for North America > Payroll Distribution > Commitment Accounting USA > UW Finance WorkCenter. 
      • Review funding string

      Funding

      2. Determine how many calendar days remain to be paid in the current fiscal year for the employees Pay Group.

      • Start counting the number of calendar days remaining in the fiscal year from the day after the most recent pay period end date.  This is found in HRS on the “Review Paycheck” page, searching for Empl ID and selecting the most recent paycheck.
      • Navigate to: Payroll for North America > Payroll Processing USA > Produce Payroll > Review Paycheck
        • Also accessible from the Finance WorkCenter found at Payroll for North America > Payroll Distribution > Commitment Accounting USA > UW Finance WorkCenter
      Review Paycheck
        • There are a total of 364 days in an A-Basis and H-Basis year.
        • A-Basis (e.g., Pay Groups BAR & BAF) Salaried Bi-Weekly and H-Basis end dates will vary by fiscal year, ranging from approximately June 18th through June 29th.
          • Payroll calendar:  https://uwservice.wisc.edu/calendars-schedules/
          • In the above BAR Pay Group employee example, there would be 266 days remaining in the fiscal year (6-Sep. + 31-Oct. + 30-Nov. + 31-Dec. + 31-Jan. + 28-Feb. + 31-Mar. + 30-Apr. + 31-May + 17-June) = 266.
        • C-Basis end dates vary by institution and year, ranging from approximately May 17 through June 5.
          • Academic year calendars for all institutions can be found here:  https://uwservice.wisc.edu/calendars-schedules/academic-payroll/; click on the institution and year; scroll to the bottom of the page and note the last day in the bottom row of dates for that institutions end date. 
          • Academic year end dates can also be verified on an employee's Job Data page, UW Custom tab, in the Encumbrances section.
          • There are a total of 273 days in a C-Basis year.
        3.  Encumbrance Calculation Formulas
        Note: These formulas always use the Comp Rate on Job Data on the bottom of the page. Do not use the Compensation Rate that is calculated at the top of the page.
        3a. A-Basis
        Annual Comp Rate (pay groups BAR, BAF)
        {[FTE x (Annual Comp Rate) / 364] x Calendar Days Remaining in FY} x % Funding Dist
        Hourly Comp Rate (pay groups HFR, HFF)

        {[FTE x (Hourly Comp Rate x 2,080) / 364] x Calendar Days Remaining in FY} x % Funding Dist

        Example:  An employee with 0.50 FTE and an annual full-time Comp Rate of $56,564 is funded 75% to one source and 25% to another, with 322 remaining calendar days:

        {[0.5 x ($56,564) / 364] x 322} x 0.75 = $18,764.02

        {[0.5 x ($56,564) / 364] x 322} x 0.25 = $6,254.67

        Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

        {[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.75 = $19,425.00

        {[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.25 = $6,475.00

        3b.  C-Basis

        Annual Comp Rate (Pay Groups BCR, BCF)

        {[FTE x (Annual Comp Rate) / 273] x Calendar Days Remaining in FY} x % Funding Dist

        Hourly Comp Rate (Pay Groups HCR, HCF)

        {[FTE x (Hourly Comp Rate x 1,560) / 273] x Calendar Days Remaining in FY} x % Funding Dist

        Example: An employee with 0.50 FTE and an annual full-time Comp Rate of $55,123 is funded 75% to one source and 25% to another, with 266 remaining calendar days:

        {[0.5 x (55,123) / 273] x 266} x 0.75 = 20,141.10

        {[0.5 x (55,123) / 273] x 266} x 0.25 = 6,713.70

        Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

        {[0.50 x ($35.00 x 1,560) / 273] x 259} x 0.75 = $19,425.00

        {[0.50 x ($35.00 x 1,560) / 273] x 259} x 0.25 = $6,475.00

        Note: for Calendar Days Remaining in FY, if calculating encumbrance effective 1/1/20XX, there are 144 calendar days through the end of the academic year ending on 5/24/20XX.  Academic end dates vary by institution. You can verify an employee's end date on the UW Custom tab on Job Data.

        3c.  H-Basis (pay groups HPR, HLR, HAR)

        {[FTE x (Hourly Comp Rate x 2,080) / 364] x Calendar Days Remaining in FY} x % Funding Dist

        Example: An employee with 0.50 FTE and an hourly Comp Rate of $35.00 is funded 75% to one source and 25% to another, with 259 remaining calendar days:

        {[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.75 = $19,425.00

        {[0.50 x ($35.00 x 2,080) / 364] x 259} x 0.25 = $6,475.00

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